Market Recap: RISI Crow's Construction Materials Cost Index

Crow's Market Recap -- A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.

Lumber: SPF producers searched more earnestly for a price floor early and began to draw more interest Thursday morning, after buyers heard of a significant order placed by China. An up-limit futures move also provided incentive for buyers to participate in greater numbers. Seeing growing weakness in Southern Pine dimension lumber prices, buyers withdrew from the market. Producers found orders difficult to garner, particularly if they were less open to deeper discounts. Producers in the Coastal species lumber market listened to counters early and accepted them for some items. Narrow widths were clearly weaker than wides. At midweek, buyers stepped in to purchases increased volumes. Inland species lumber prices were discounted early, enabling mills to sell greater volumes. Prices recovered all the lost ground and then some by the end of the week. Radiata Pine Mldg&Btr traded in a narrow range of published levels, although one report of prices considerably higher was circulating. Availability was, at times, a frustration to both buyers and sellers. Although prices do not reflect any change, Ponderosa Pine Moulding and Shop lumber markets displayed a bit more energy. Limited availability, along with a modest uptick in demand, was enough to move the price of Ponderosa Pine Selects and Commons higher. After a long run of near parity between supply and demand, the pendulum swung in favor of producers. Steady sales of ESLP #2&Btr and #3 were reported. Eastern White Pine producers reported good sales of Standard and solid order files. The major influence on the Western Red Cedar market remained the lack of fiber and subsequent strong sales volumes. Buyers continued to purchase even further into 2013, trying to maintain a steady stream of supplies now extending well into the second quarter.

Panels: The OSB market was uneventful in most regions of the U.S. and downright slow in others. Western Canada saw a slight rally, as reports of a fire at an OSB mill circulated. Hints of moderately improved demand at week's end in the Southern Pine plywood market took a backseat to the limited buying mills experienced throughout the week. Urgency on the part of mills to sell off Western Fir plywood volumes provided an opportunity for some distributors to garner sheathing at considerable discounts. After those prices were tested, producers raised prices off those floors. The Canadian plywood market saw little impact from the WRLA show or upcoming road restrictions. It did see a window of price adjustment, as a major producer discounted loads of standard panels. Steady particleboard sales kept prices steady yet soft in some instances. Mills continued to take turns pressing their MDF prices higher, with a producer announcing increases for March for moulding manufacturers.